CCAB issues draft of proposed LLP SORP

CCAB has published for comment a draft Statement of Recommended Practice (SORP) on accounting by Limited Liability Partnerships (LLPs) incorporated in the UK and the Republic of Ireland, which will have to be finalised and available for use before the new UK GAAP regime comes into force from 2015, reports Harris & Co chartered accountants.

The purpose of the SORP is to ensure that, as far as possible, LLPs present financial statements that are comparable with those of limited companies. As a consequence of the introduction of the new UK GAAP that sees all extant SSAPs, FRS nd UITF abstracts being replaced with FRS 102, The Financial Reporting Standard applicable in the UK and Republic of Ireland, the various issuing bodies are releasing revised SORPS.

CCAB, the industry body which represents five professional accounting institutes, including ICAEW, ACCA, CIPFA, ICAS and Chartered Accountants Ireland, has issued the LLP SORP, which includes significant changes to the existing accounting treatment under UK GAAP.

CCAB chairman, Anthony Harbinson, said:

‘While many of the proposed changes are relatively straightforward and will not affect existing practice, others – such as the updated guidance on business combinations, group accounts, contractual or constructive obligations and annuities – are more substantive. We therefore encourage constituents to consider the exposure draft carefully.’

Andrew Vials, chairman of the CCAB SORP LLPs Steering group, said:

‘LLPs are a popular corporate vehicle for many small and medium-sized enterprises. The SORP has long established accounting practices for such bodies and ensures accountability and comparability. It now needs updating to bring it into line with the requirements of FRS 102.’